Welcome to Seeking Alpha's Wall Street Lunch, our afternoon update on today's market action, news, and analysis.

Good afternoon. Today is Wednesday, September 17th, and I'm your host, Kim Khan. This is a special Fed episode of Wall Street Lunch.

The Fed cuts and Powell herds the cats, or hawks and doves. The Federal Reserve cut interest rates for the first time this year,

lowering the Fed funds rate by 25 basis points to 4 to 4 and a quarter percent.

And Fed Chairman Jay Powell showed he can still build a consensus,

with 11 of 12 FOMC members voting for the quarter point cut,

despite the drumbeat of a need for big rate cuts from the president

and rising worries about the labor market. The one dissent was from new interim board

member Stephen Myron, who still holds a position in the White House and voted for a cut of 50

basis points. The UFMC did acknowledge those job risks in its statement. The Fed said,

recent indicators suggest that growth of economic activity moderated in the first half of the year.

Job gains have slowed, and the unemployment rate has edged up but remains low.

Inflation has moved up and remains somewhat elevated.

Economist Justin Wolfers says that represents a sharp downgrade in the Fed's confidence about our economic condition,

and that the statement makes it official, stagflation is in the room.

In the summary of economic projections or dot plot,

the median forecast was for two more quarter point cuts this year.

One dot called for 150 basis points of cuts this year,

presumably Myron, who also presumably was the big bull on GDP through 2028.

The median dots also showed one cut in 2026 and 127 in 27, but they also showed higher GDP and core PCE inflation for next year than they did in June, and a lower

unemployment rate. Alliant's advisor Mohamed El-Aryan said, no wonder some are calling this a divided

and confused Fed about the long-term outlook with little conviction. At his press conference, Powell called

...